I bought a hash brown this morning, even though I didn’t need it. I’ve somehow fallen back into the trap of eating out instead of buying groceries and being a responsible adult. It’s an internal struggle that has never gotten easier, and I spend far too much time worrying about it. Anyway, after a full week of eating food I bought and not succumbing to temptation, I bought a hash brown and beat myself up over it far longer than anyone should. In order to get my guilt off of my mind and put things in perspective, this week in financial blunders we take a look at big problems countries and companies are facing.
In Russia, Bank Breaks You
The Unites States’ sanctions on Russia have put Visa and MasterCard in an awkward position. According to The Guardian, on March 21, the credit card giants decided to stop servicing payments for clients of Rossiya Bank and its daughter company Sobinbank as a result of the government sanctions. Rossiya bank was included in the sanctions because it’s owned by Vladimir Putin’s peer, Yury Kovalchuk. Card operations were also blocked for SMP bank because it’s owned by Putin’s “old judo buddies.”
Because of this freeze from Visa and MasterCard, the Kremlin fashioned a new law that “forbids international payment systems from cutting off services to Russian clients and obliges them to base their processing centre in Russia.” To make sure this happens, Visa and MasterCard must pay a security deposit equal to two days of cashless transactions. Averaging in the business these companies made last year, the deposit they’ll have to make is estimated at $3.8 billion. If either bails from this agreement and starts freezing transactions again (assuming Visa and MasterCard agree to this), they’ll be fined 10% of the security deposit amount per day they continue the freeze.
Prices have dropped at high-end grocery stores, but not in the area consumers would hope for. Earlier this week, Whole Foods had an earnings presentation where it announced a change in business: their pricing strategy had to change because competition in the “fancy” grocer market was growing rapidly. Wall Street’s response to this was not good, as stocks dropped rapidly for Whole Foods after the announcement. Their stocks were trading around $50 a share in recent weeks, but the price dropped to $38.93 at the end of Wednesday. The ironic part of this announcement on growing competition is that Whole Foods’ competitors also saw their stocks drop after the announcement. Buzzfeed Business reported that the shares of both Sprout Farmers Market and The Fresh Market dipped approximately $5 per share.
For what it’s worth, the hash brown was delicious, but it was not worth the money I spent. That’s the financial blunder I’ll take to my grave, but if you want to discuss another blunder, please comment below.